Lithium Prices Soar As Tech Giants Fight For Supply
February 23, 2021 at 08:00 AM EST
FN Media Group Presents Safehaven.com Market Commentary
New York, NY – February 22, 2021 – The electric vehicle revolution is gaining serious momentum. According to experts’ projections, demand for electric vehicles should rise at a 21.1% Compound Annual Growth Rate until 2026. The extraordinary demand that is forecast for EVs over the next five years has now begun to trigger a massive disruption in the global energy markets. As demand for EVs continues to move higher, the demand for lithium – the critical component needed for the batteries that power all those EVs – is also projected to climb higher. Mentioned in today’s commentary includes: Apple Inc. (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Alphabet Inc. (NASDAQ: GOOGL), NVIDIA Corporation (NASDAQ: NVDA), Intel Corporation (NASDAQ: INTC).
According to Roskill Information Services, “lithium chemical demand from end-use sectors is expected to increase year-on-year to around 280,000 tonnes lithium carbonate equivalent.” These projections have already begun to have a profound impact on the price of lithium in the marketplace.
Lithium prices declined from 2018 through the end of 2020, but since December 1, 2020 the price of lithium has soared 71.24% — and could be poised to climb even higher. And one under-the-radar company, United Lithium Corp. (ULTH; ULTHF), appears that it could be at the right place at the right time. United Lithium’s flagship project is a recently discovered lithium deposit located in central Sweden. The company has agreed terms to acquire the project, with closing expected by April.
A European Lithium Hotspot
The Bergby project is a recently discovered lithium-rich pegmatite deposit in central Sweden that offers an ideal location. This property is near to the world famous Woxna graphite mine, the new Northvolt lithium battery gigafactory and close to major mining and transportation infrastructure, workforce and equipment suppliers.
The Bergby project, if proven up as a commercial deposit, is optimally positioned to benefit from access to the EU market and its growing demand for alternative energy vehicle manufacturing, high tech devices and grid storage systems.
In addition, the project’s proximity to next generation lithium-ion battery manufacturing plants is critical, as is access to nearby EU educational institutions and low power costs for processing hard rock lithium bearing minerals cost-effectively.
Historic Sampling Shows Extensive Lithium Mineralization
Assay results from 41 boulders shows Li2O (lithium oxide) values averaged 1.06% within a range from 0.03% to 4.56% Li2O; and Ta2O5 (tantalum pentoxide) assays averaged 168ppm, ranging from 1 ppm to 499 ppm Ta2O5.
Further mapping located lithium mineralization in outcrops. Fifteen samples collected from three outcrops returned Li2O values averaging 1.71%, ranging from 0.01% to 4.65% Li2O; and Ta2O5 values averaging 133 ppm within a range from 16 ppm to 803 ppm Ta2O5. In 2017, the first and only drill program was completed at the Bergby project. In that drilling program, 28 of the 33 holes drilled on the property intersected lithium mineralization along approximately 450m strike length.
The deepest holes tested to only 65m below surface with mineralization is still open along strike in both directions and well as down dip. Three principal styles of lithium mineralization have been observed in widely -spread boulders and outcrops at the Bergby property, providing encouragement that mineralization may be extensively developed.
What’s Next For Europe’s Lithium Boom?
The European Union has sounded the alarm on critical raw materials shortages, estimating that to meet its climate neutrality goal, it will need up to 18 times more lithium and five times more cobalt in 2030 than current consumption.
By 2050, the EU estimates that it will need a staggering 60 times more lithium than current demand. For this reason, the EU has added lithium to its critical materials list and launched a multi-billion-dollar fund to help speed the production of raw materials to supply the European battery market.
This means there is potential for significant capital available for projects such as United Lithium Corp.’s Bergby project as the scope of the project comes into focus. Now that a discovery has been made at Bergby, the next task for United Lithium (ULTH; ULTHF) is to define the overall size and grade of the lithium and tantalum resource on the property.
The deposit at Bergby is open along the strike to the north and south…and there are additional known pegmatites in the area that have never been tested for lithium mineralization.
Experienced Management Team is Ready to Deliver Results
One of the most important factors in evaluating any exploration company is the quality of its management. In the case of United Lithium (ULTH; ULTHF) the company is led by an experienced leadership team with geologic expertise as well as a history for leading successful exploration companies.
Michael Dehn – President, CEO & Director
With over 20 years of experience in the mining industry, he worked as an exploration geologist and later as a Senior Geologist with Goldcorp Inc. Michael has been a director and officer of publicly traded and private junior mining companies. His expertise lies in grassroots to advanced minerals exploration, and marketing and financing junior companies and Mr. Dehn has extensive experience in lithium and cobalt exploration and processing.
Faizaan Lalani – CFO & Director
Mr. Lalani is an accounting and finance professional with over 10 years of experience covering audit, financial reporting, corporate finance, and operations management. Mr. Lalani previously worked in the audit and assurance group at PricewaterhouseCoopers LLP, Canada, where he obtained his CPA, CA designation, gaining vast experience in accounting practices in both the public and private sectors during his tenure.
But now, it’s even getting into the transportation business. Apple’s rumored car design means that more active material can be packed inside the battery, giving the car a potentially longer range. Apple is also examining a chemistry for the battery called LFP, or lithium iron phosphate which is inherently less likely to overheat and is thus safer than other types of lithium-ion batteries.
Microsoft (MSFT) is a tech giant that creates everything from software to hardware and more. This is important because not only does it help companies with exploration of minerals, it relies on them just as much. That’s why Bill Gates’ tech giant has made numerous investments in clean energy across the globe. From Ohio to the Netherlands, Microsoft is pouring millions into solar and wind projects to not only help reduce its own carbon footprint but also help neighboring communities do the same.
In addition to its investments and green operations, Microsoft is also getting into the auto-game. Microsoft’s Azure cloud-based infrastructure and edge computing is going to be pivotal in this new industry. Not only will it allow automakers to analyze data and optimize their products, but it will also give them the opportunity to conduct advanced tests and simulations to fine-tune their software in risk-free environments. It’s even partnering with leaders in the auto industry such as Renault and Audi.
Nvidia Corporation (NVDA) has made major progress towards a more sustainable tomorrow. And as a chipmaker, it is reliant on the production of key metals and minerals such as copper and lithium. But what makes NVIDIA even more special is that it is tackling the ESG trend on all fronts. In fact, it was ranked as one of the world’s top 100 companies to work for due to its incredible working conditions, hiring practices and professional development programs.
Not only is Nvidia a role model for companies in its social and governance stance, it is also firmly committed to building a greener future, as well. From its push to use renewable energy in its day to day operations to its innovative technological advancements in chipmaking which reduce the amount of energy needed to power devices, Nvidia is checking all boxes for impact investors.
While electric vehicles are the talk of Wall Street right now, autonomous vehicles are on the horizon as well, and they too will rely on a number of key metals and resources. And the leader in this push is Waymo, a subsidy of tech giant Alphabet Inc. (GOOGL). Waymo may just be the de facto leader in the emerging autonomous vehicle industry. It’s already had cars driving themselves across the United States for several years. In fact, in Arizona alone, Alphabet’s self-driving cars have logged over 6.1 million miles. To put that in perspective, that means that Alphabet’s autonomous cars have driven the distance between New York City and San Francisco over 2100 times. Or, as the company explains, “over 500 years of driving for the average licensed US driver.”
While Alphabet’s Waymo gets a lot of credit for these massive accomplishments, a widely loved and wildly popular chipmaker is at its core. Intel Corporation (INTC) and Waymo teamed up way back in 2017, and have worked together to fine tune their technology together ever since. Through their mutual knowledge of hardware and software, the tech giants have made leaps and bounds towards building the car of the future.
In addition to its efforts with Waymo, Intel has also been on the forefront of developing its own artificial intelligence and vision hardware. Back in 2017, it acquired MobileEye, a supplier of camera-based chips and software to the global mobile industry. And now, in a new deal with Luminar, another emerging tech company on the forefront of this movement, Intel is positioning itself as its own giant of this new sector.
By. Jody Wilson
The technical information presented in this article has been reviewed and approved by Robert W. Schafer QP, PGeo, as defined by NI 43-101
**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY**
This article contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this article include that demand for lithium will increase in future as currently expected; United Lithium’s business and plans, including with respect to undertaking further acquisitions, completing the acquisition of Bergby, acquiring additional mineral claims nearby Bergby, complying with the terms of the Bergby acquisition and carrying out exploration activities in respect of its mineral projects; that most of the lithium is reachable close to surface; that they can reduce costs compared to many similar projects; that ULC can produce a PEA by Q3 2021; and that they can raise $4M quickly. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that the Company may not be able to finance its intended drilling programs, aspects or all of the property’s development may not be successful, their methods of mining of the lithium may not be cost effective; the risks that the acquisition does not complete as contemplated, or at all; that United Lithium does not complete any further acquisitions; that they do not acquire the additional mineral claims in the region of the Project prior to March 21, 2021; that United Lithium does not spend $1,000,000 on exploration work on the Project within 18 months from the Closing Date; the Company may not be able to carry out its business plans as expected; changing costs for mining and processing; permits may not be granted for the mining projects; increased capital costs; the timing and content of upcoming work programs; geological interpretations and technological results based on historical or even current data that may change with more detailed information or testing; potential mineral recoveries assumptions based on limited test work with further test work may not be viable; competitors may offer cheaper lithium; more production of lithium could reduce its price, or the price may drop for other reasons; alternatives could be found for lithium in battery technology; the availability of labour, equipment and markets for the products produced; and despite the current expected viability of its projects, that the minerals cannot be economically mined on its properties. The forward-looking information contained herein is given as of the date hereof and the writer assumes no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.
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